Money Mistakes You Could Regret Later in Life

There comes a time in your life when you reach a certain age or stage in your career when you can look back and reflect upon where you are at.  You don’t have to necessarily be old to do this; you could be in your thirties, ten years into working and still have wished you had done things differently, driving further motivation to ensure you are doing what is right by your financial life.  Before it is too late, ensure you can avoid making money mistakes now so you will not have to regret later.

Renting vs. Buying

I was a fairly independent young adult, so I was ready to move out on my own outside of college, probably too soon, in fact, that I spent years renting instead of buying my starter home.  While I would not trade the great times, I had with my roommate and best friend, it would have been nice not to have thrown money away on rent for two years instead of towards equity in a home.  Looking back, either continue to live at home until I could buy a house.

Being “House Poor”

While it is great to invest in real estate, sometimes you can get over your head and buy the biggest and the best and have most of your income taken up by the mortgage payment, not leaving much left for anything else, hence being house poor, so to speak.  You can own and live modestly, while freeing up more money to have fun, afford expenses comfortably, and save, save, save.

Not Having Money for Unexpected Charges

If you had major car repair, had to purchase a new furnace, or worse case, lost your job, how would you be able to afford without putting on a credit card and sending you into debt?  Experts have said that you should keep at least three months’ worth of expenses in an account in case you need to access later.  You probably want to avoid putting too much in there though, as it could be better suited an investment account, earning more than the tiny interest in a savings account.

Never Using a Budget

A Budget is a great way to track every dollar coming in and going out.  If you can set allocated funds for bills, food, gas, spending, as well as contributing to savings account, you can continue to free up extra money as you reduce unnecessary spending.  If you review the previous month’s statement, you can circle necessary vs. unnecessary spending, and add up those that could have been avoided and you could be surprised.

Forgetting to Build in Life Experiences

Speaking of a budget, while you do factor for all spending, it is important to budget for life experiences, as they are important to not only your sanity, but enjoying life.  If you can plan vacations, concert and sporting event tickets in advance, you can still be able to take part by planning in advance and not getting hit at once when you are ready to book.

5 Excuses to Avoid Not Saving for Retirement

Retirement seems like it is so far away that it is probably the furthest thing from your mind right now, especially if you just started your career, we’re talking decades away from happening.  What you should realize is though, is that the earlier you can contribute, the more it will compound, and the more you will have to enjoy when you need it.  Avoid all of the putting retirement savings off excuses and start contributing now.

It’s Not a Priority Right Now

That might be a valid excuse for your high school, college, or even immediately out of school and into your career, but the longer you wait, the less you will have to live off and enjoy in retirement, so if it is not a priority right now, make it one.  You can still save for your next vacation but you will need reduce expenses somewhat so that you can allow a portion of your income to be saved.

Don’t Have Company Matching Contributions

Some companies offer if you contribute to 401(k) they will match up to a certain point, say 6% per example.  That is free money, of which could be thousands of dollars put in your account just by you contributing the same, but just because your company does not offer, you still need to contribute the maximum you can, and even higher without the extra gift from your workplace.  The next time you are in the market for a job, take 401(k) matching into consideration.

But I’ll have Social Security

If you are a Baby Boomer you will be lucky if Social Security will be there when you retire, let alone a Millennial.  Well maybe it is not that far off from being extinct, but any notion that you will be able to live off of Social Security can be squashed right now.  Even if it is there by the time you retire, it will be a fraction of what you make now, so if you are used to living high on the hog now, those days will for sure be over, when it will be the time you should be enjoying life even more.

Afraid There Will Be Another Crash

You could be a little more conservative with your retirement fund allocation, but you can’t let the stock market crash of roughly ten years ago sway you from saving for your future.  Sure, most of you, and if you’re younger, your parents, may have finally recovered from that devastating crash, you cannot jeopardize your future for something that may or may not happen, that is out of our control.

I Don’t have the Extra Money

Now I totally understand that if you are barely getting by with your regular bills, there is not much leftover to contribute to savings, but this is where you will have to be creative.  What is your spending money situation like?  Do you have excessive shopping, go out to eat a lot, do the bar scene?  Well every little you can avoid spending you can put towards saving, so try and make the best spending decisions you can.

Five Ways to Make Your Financial Life Easier

Let’s face it, managing money can be stressful, whether you have it or not.  It can put plenty of weight on your shoulders and the sinking feeling sets in if you are starting to become buried in debt.  While handling the finances can be overwhelming, there are a few ways that you can make life a little easier for yourself by not only first taking a deep breath, but to make some adjustments in your life that you will allow you to be more successful handling the family finances.

Review Finances More Often

It can be quite a shock to go over your bank or credit card statement when it comes in, seeing that total due by the beginning of the month, wondering where you are going to be able to come up with the money to pay off the balance.  By reviewing the finances more often, such as weekly, you can go over every dollar spent during the month, not to mention each bill coming due to ensure you have gotten it down to the lowest it can be (i.e., electric, gas, cable, cell phone).

Get Rid of Paper Statements

Reminded of the Seinfeld episode when Kramer decides he no longer is accepting mail, it can be annoying not only to check the mailbox each day, but to make sure you are receiving everything you should.  When it comes to bills, statements, etc., turn off paper statements and start to receive emails.  You will receive right away and can plan ahead with plenty of advance of it coming due to ensure you have sufficient funds.

Automate Direct Deposits

I’m assuming that your paycheck is already direct deposited (if it’s not, that should be the first thing you do tomorrow morning with your employer), but more specifically, once you have paid bills for the month, do you manually transfer money over to your savings account?  If there is money leftover in your checking account you will likely spend it, so save the trouble and set a predetermined direct deposit to your savings account each paycheck and avoid manually transferring money back and forth.

Equalize Monthly Bill Payments

Bills are due at all points in the month, so one way I’ve been able to have success is to divide up the bills as equally you can for each paycheck.  Let’s say for example half of your bills you can pay with the first paycheck and the other half with the second.  That way you can avoid any shortages and have more of a set payment and spending money available schedule.

Stick to a Single Card for Purchases

Credit cards can be tricky, with virtually endless spending limits, so you may be enticed to use many cards, but it will be significantly easier if you stick to one credit card or debit card for purchases, knowing what you have spent and when it is due.  Picking the card with the best rewards program can net you plenty of savings, whether is in redeemable points or a cashback check once a year.

A Plan to Improve Personal Finance Substantially by the End of the Year

Life is full of obstacles and other priorities in the moment that make it easy to put off financial planning until down the road, but the problem is that time goes by just way too fast and pretty soon before you know it you are halfway to retirement age and not much to show for it.  Before it is too late and you can salvage some financial future, the time is now to improve your personal finances significantly by the end of the year even.

Sit Down to Review Full Financial Picture

Whether it is your spouse, a knowledgeable friend or family member, or even a financial planner, you will need a place to begin.  This would be the all-important step of reviewing what your goals are, and put a place in place to reach, while paying off debt and increasing savings.  This could be a good time to go over current spending habits as well to look at areas of improvement, as you will want to reduce unnecessary spending.

Create a Budget You Can Stick To

This is where it gets tough and will take a little tweaking along the way.  You will need to note every dollar that comes in as far as income goes, and everything that goes out.  This would be monthly expenses and all spending as far as food, gas, and fun, and not to forget contributing to a savings account.  As you specify how much money goes to each, the trick will be to make sure that is enough to cover and realistically stick to it.  If you can, you will reduce spending and open up plenty of extra cash.

Build Up an Emergency Fund

An emergency fund is good to have as a place to access cash if you need it, and the key word being in an emergency.  As part of the budget you will want to reduce spending and every dollar will be accounted for, so a large unexpected expense such as auto repair may throw your budget out of whack, so instead of putting on a credit card, you can access your emergency fund to pay for.  Experts say that three to six months is sufficient, with six being there to cover an unexpected job loss.

Increase Retirement Contributions

Now that you are trending in the right direction and hopefully freeing up extra money each month as you are reducing spending, you should start to increase your contributions to a work 401(k) account or an IRA, where you can grow over time to hopefully support you after you have retired and live out the remaining of your golden years.

Continue to Make Progress

If you have followed these steps you should be in pretty good shape in the upcoming months, with the hope that you have been able to successfully figure out your goals, create a budget that you can follow, and by the end of the year hopefully you’ve been starting to build that emergency fund so that you will then be able to put your efforts to saving for retirement.

4 Ways to Be More Financially Responsible

If you actually sit down and look over your finances, first adding up how much money comes in each month and then totaling the expenses and spending that occur, it probably will leave you sick to your stomach.  It is never too late to start being a little more financially responsible.

Set Up an Emergency Fund

Experts have said that you should have at least three, even up to six months of reserves sitting in an account just in case you have a sudden need of cash to pay for say an auto repair, or replace a TV or refrigerator, it is nice not to put on a credit card, especially if you are on a strict budget and this could take months to pay back.  Six months would be good to have, never know if there is an unexpected job loss.

Make Regular Contributions to a Savings Account

It can be tough to find extra money to put into savings, especially if you are having trouble making ends meet now, but if you have to manually transfer money over the probability that you will spend it on other things is far greater than if you were to make regular automatic deposits to a savings account.  Start with a couple hundred dollars a month if you can, gradually increasing as you get used to the money not being available in your checking account to spend.

Don’t Forget About Retirement

So, you have ample reserves for an emergency and are starting to put a little into a savings account for the future, but what about something that will grow with compound interest that you can contribute to that will take care of you in your golden years?  Well do not forget about your 401(k) account at work.  Like you have been doing with the savings account, start to give regularly scheduled contributions each paycheck, starting with say 1-3% for the first year, gradually increasing each year.  If you have the opportunity to have the company match any contributions you should take advantage of that, as otherwise it is just leaving plenty of money on the table.

Continue to Reduce Unnecessary Expenses

With a huge portion of your money now funding various accounts to leave you better prepared for the future, it may not leave much left otherwise, but that is the goal.  Now that you are an “adult”, you need to start being a little more financially responsible and stop splurging on unnecessary items.  My wife and I just went out to dinner the other night, we did not feel like cooking or grabbing unsatisfying carryout, so we went to a local favorite Italian restaurant and spent $60 on entrees, one drink, and tip.  While the food was excellent, we probably could have done without and found something to eat at home for free.  That is the mindset to start to have, how can you save extra money every week.  That savings added up every month, think of how much you can save in a year.

How to Improve Your Credit Score Starting Now

Your credit score is the first impression of you when it comes to lenders, and it can tell a lot about you, if you are a responsible borrower, or if you do not take your finances seriously.  Whether you already have great credit or you are in need of improvement, you should always strive for the best to take advantage of the best rates on the market.

Take a Look at Your Credit Report

The fastest way to improve your score may just be because of misinformation on your report that needs to be cleared up.  You should at least look at your credit report once a year to make sure that all personal information and accounts are up to date.  Keep in mind that reports are usually at least a month behind, so if you just made a large payment or closed an account recently it may not have caught up yet, so not to worry.

Pay Down Any Debt

If you have a spending issue now, the first plan of attack is to stop using a credit card to avoid continuing to rack up the account balance that you are currently not able to pay off, so why keep increasing it.  Cut up the card if you have to, whatever keeps you from spending, and really focus on paying down debt.  If you are carrying a balance over each month, you will be charged interest, so you will need to make large payments in order to see a reduction of the principal balance, instead of the payment all going towards interest charges.

Keep Accounts Open

A common misconception is that once you pay off an account, the first instinct would be to cut up the card and close the account.  While cutting up the card is not a bad idea so you can avoid using the credit card if you previously had a spending problem, but closing the account could actually hurt your score.  A portion of your credit score is based upon the overall debt to available credit, so if the account is closed, you could drastically be reducing your available credit and make your debt situation look a lot worse than it actually is.

Set Up Automatic Payments

The biggest advice to give, is pay on time.  Late payments that are thirty days past the due date can stay on your credit report for up to seven years, so to show lenders that you are a responsible borrower, make sure it is paid on time.  Not only to keep your credit report in check, but paying even a day late can incur late fees or hike up APR, which will make interest charges skyrocket.

Stop Applications

Although it is a small portion, credit inquiries do make up part of your credit score, so every time you apply for a new credit card, personal loan, or mortgage, when they pull your credit, it affects your score.  Try and make sure that if you are having your credit pulled, you are looking to proceed if it improves your situation such as a mortgage refinance to a lower rate, or a credit card with say 0% APR.

How to Financially Plan for the Birth of a Child

The birth of a child is said to be a miracle, but it is a miracle that we can even afford children in this day and age.  If it is your first child, you are in for a rude awakening.  According to a recent study by the U.S. Department of Agriculture, the cost of raising a child born in 2015 until the age of seventeen is $233,000, or $13,000 a year, and that does not include the cost during pregnancy or the whopping costs of college.  Before your little one is born, try and plan for what will likely to be a huge hit to the wallet.


Having a household budget is important no matter the size of the family.  It may be a little easier to budget if you are solo or even married, but throw in children to the mix and you will begin to adjust on the fly.  Babies bring extra expenses that come with medical bills, but as the child gets old you will need to factor in food and activities to monthly costs.  It is no wonder that two-thirds of American’s fail at a successful budget.

Start Saving for Day Care

As soon as you find out you are having a baby, it would be a good time make sure not only that emergency fund is built up, but that you begin to save for day care.  With most day care centers charging upwards of $60 per day to care for your child, for working parents that will add up to huge costs over the course of a month.  Figure around twenty working days, you can plan on spending the cost of an extra mortgage payment a month.  Maybe you have a relative or friend that is retirement age that wouldn’t mind being paid a discounted rate.

Try and Make Other Sacrifices

Like any successful budget to work, you will need to reduce unnecessary expenses so that at the end of the month, there is more money coming in than going out.  Well throw in having a child, and you will need to continue to cut spending even further, most likely reducing some of your priorities.  If concerts are your thing, maybe you go to a few shows a year instead of all of your favorites.  Eating out is probably the biggest money saver, so if you really try and stay strict on going grocery shopping and only going out to eat once in a while, you will see the savings add up.

Life Insurance Premiums

If you are looking to leave your spouse and baby with a comfortable means to live on for a while due to your unfortunate passing, then setting up a life insurance policy right away is a must.  Premiums will begin to go out the older you are, so if you are young, healthy, and free of tobacco, then you could probably get a good thirty-year policy for around $40 a month, which is not bad knowing that at least your family is taken care of if something were to happen.

How to Keep Personal Finance Successfully Organized

Usually the end of the year can be a reflection period when it comes to our personal finances.  We take a look at what we have in the bank account, how much debt we have, and wish we could have done things different.  There can always be improvement and it is never too late to start.

Set Up Payment Dates

With so many payment due dates between the mortgage, loan, utilities, phones, and credit cards, it can be overwhelming to keep track of the payment due dates and when to make payments to ensure you have sufficient funds, with enough money left over for everyday expenses such as food and gas.  If you are paid bi-weekly, for example, try to evenly distribute expense payments between the paycheck dates, setting up automatic payments for the best payment dates.  As long as you do not pay late (mortgage and car lease usually have grace periods), paying on or before the due date that spreads out available funds may work better instead of say paying all in the beginning and not having much left for the remainder of the month.

Direct Deposit to Savings Account

If you set aside money for yourself automatically, there will be less temptation to spend it on unnecessary items and prepare yourself for financial success in the future.  Setting up a payroll direct deposit to a savings account will be a great way to contribute every paycheck, building up that much needed emergency fund in case a large unexpected expense were to occur.

Monitor Every Dollar Spent

As you are working on getting your finances in order, one thing that needs to be a way of the past is careless spending.  It is time to get out the bank and credit card statements and monitor every dollar that goes out.  Take a look over the course of a month what the spending was, see if you can separate what was a monthly bill, and what was spending money.

Follow a Household Budget

Now that spending is under a microscope it should open up your eyes just how much money is going out the window every month and it is time to lock up the wallet.  Start allocating funds to needed monthly expenses such as utility bills, mortgage, car lease, and necessary spending on grocery shopping and gas, while still contributing to a savings account.  This should hopefully keep a tighter budget within the household and limit spending to necessary items.  Be sure to still budget for fun, as that does not have to end entirely, just have to be smarter about spending without sacrificing your future.

Keep Track of Documents

As you are about to find out as tax season approaches in April, if you haven’t already started piecing together to prep your upcoming return to see if you are getting a refund, it takes time to gather up all of the documents.  Compiling in a folder on your computer, or even printing out and storing in a file cabinet, keeping important documents such as W-2’s, student loan interest forms, mortgage loan interest statement, charity deductions, etc. in an easily accessible place will help when it is time to file.

How to Get Finances in Order to Start 2017

The end of the year is usually a period a reflection, not just where you are with your life, job, dating, but also where you stand financially.  If you have made poor choices when it comes to spending or a lack of saving, then it is never too late to turn things around.  Putting off any financial responsibilities to the future will never leave you in a good position in retirement.  Even if you are in your mid-thirties it may seem like you have all the time in the world, but think about how quickly it has gone by since you have been out of college.  Take a look at your finances and have a great start to 2017.

Use a Budget

Creating a budget to track all of the money going out and coming in is not entirely difficult, but actually sticking to it is another story.  It can be easy to quickly dismiss if a budget is failing, but it actually will take a few months to tweak it to work.  If you are unwilling to remove any unnecessary spending, or have the wrong amount of funds allocated to each area, you may be doomed from the start.

Don’t Forget About You

A recent study by GOBankingRates found that one-third of Americans have absolutely nothing saved for retirement, with a separate study showing the same amount of us have nothing saved in savings account either.  What that means is that if there are no adjustments made now, you will enter your golden years with a penny to your name.  Start taking advantage of company matched 401(k), or invest in either a traditional IRA or Roth IRA to invest in your future.

Take a Look at Your Credit Score

With so many credit card companies offering your credit score free on monthly statements, there should be no reason you could be in the dark when it comes to your credit.  Once a year the major credit bureaus offer a complete copy of your credit report (without a score) free, so you can review for any inaccuracies, especially if you plan on having your credit pulled for a refinance/purchase loan, where higher interest rates could cost you thousands over the course of the terms.

Put Year-End Bonus to Good Use

Getting a holiday bonus is great and the first instinct may be to blow it on something you have always wanted, but before you go running to the store, make sure it is going to good use.  Any extra money should be first going towards paying off debt and setting up an emergency fund.  Only after that should the money be spent elsewhere.

Gather Up Charitable Donations

It can always be scary to wonder how much you will owe when it comes to filing your tax return, so why not have a little extra coming back being able to write off charitable donations.  Cleaning out your closet, garage, or basement could be great places to donate clothes and other household items to those in need.

Smart Ways to Save Money in December

The holiday shopping season drains the bank accounts enough, so we should be looking to save every dollar possible.  Sometimes removing unnecessary spending is not enough and we need a little adjusting in other areas to maximize savings.  This December would be a great time to make a few tweaks to set up 2017 for financial success.

Set Up Direct Deposit for Savings Accounts

Having the available funds in your checking account will often prevent any from moving over to savings accounts because it is there for spending.  Instead, set an automatic deposit from your paycheck that will automatically going into savings so you avoid any temptation to either not move over as much as you should, or spend it all.  By starting with a little a fist, you will not even miss it, and then can gradually increase each paycheck so that you will see a continuous rise in the savings account balance.

Spend with Cash Instead of Credit

Not that using cash instead of credit will stop spending altogether, but it may give second thought to any unnecessary spending if you are only using your own set allowance.  Seeing the cash leave your hand and go into the cash register should at least make you think about if each purchase is worth it.  Credit cards can often feel like play money, not having to worry about paying until the next month’s account statement arrives.

Start Setting Donations Aside

With 2016 coming to a close it is time to start thinking about the upcoming tax season and now would be a great time to get your donations in order to write off when you begin to file.  A good place to start would be cleaning out the closet, putting clothes in piles of not only washing, but what can be donated versus time to throw away.  Next scouting out each room for any larger items such as furniture, TV’s, or the CD’s, DVD’s, and books that are probably now collecting dust in the digital age.

Keep Cold Air Out

The winter weather is upon us and before months go by wasting away extra money on our gas bill, it is a good time to check out doors, windows, and outlets that share an outside wall for drafts.  Running a new line of caulk or foam insulation will immediately keep the warm air inside.  Any way we can help from the heat kicking on as often will only save you money not only in December, but the entire cold season.

Take Advantage of Credit Card Rewards

With the holiday season in full force, since we are spending a ton of money anyways, we might as well get a little back in return.  Check your credit card rewards program to see that are you taking full advantage, getting points for purchases that you can redeem in gift cards, or a lump sum cashback check.  Just keep an eye on that spending balance to make sure it still fits your budget now that you are putting on credit instead of using cash/debit.

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